FROZEN IN TIME
If you are like me the past few weeks have felt pretty surreal. Self Isolation, there’s one of the top candidates for the phrase of 2020. I digress, as I try to suppress the mounting cabin fever and anxiety knowing that there's probably another 30 days of this.
However, we still have something in common to bond us in conversation: the Guelph real estate market.
Our team has spent the last 2 weeks talking to our clients and colleagues, wrapping our heads around what a virtual viewing entails, completing deals and conducting business, not as usual, in the midst of a pandemic.
I wrote in last week’s blog that the numbers didn’t reflect what was happening in the Guelph real estate market. Today we are seeing the tip of the iceberg. Sales this week were down 56% from the same week last year and down 48% from the sales reported last week. Rapid deceleration from what was starting to be an incredible spring.
With the exception of Waterloo, the March 2020 numbers were all double digit increases over March 2019:
March in Guelph was within 41 transactions of the record numbers put up in 2017. No doubt in my mind we would have set a new record had the world not been interrupted by COVID-19. The conditions that spawned the early 2020 spring market were the same as in 2017, ultra low inventory levels, low mortgage rates and a very confident set of buyers.
The pandemic coincides with the end of the first quarter of the real estate year, and as you see on the accompanying report (below), the effects of COVID-19 haven’t impacted our Q1 numbers. Sales in Guelph were up almost 27%, listing up 3.5% and the median sales price up 13.3% to $555,000, compared to Q1 of 2019. Incredible numbers that were foreshadowing potential problems similar to what we experienced in 2017.
There are going to be a lot of lessons learned from the COVID-19 event. Contingency and back up plans will be critical moving forward. As a company, we learned that lesson 2 years ago when we were forced out of our office for part of a day and realized that we didn’t really have a plan to carry on the business if we didn’t have access to our office. Today, I’m grateful we spent the time to put a business contingency plan into place that allowed us to close our offices two weeks ago and continue working without really missing a beat. My home office has now become head office and I’m loving the commute in the morning. Our staff and team are all working from home and following all the guidelines issued by health authorities.
The question on most of our minds is what will our real estate market look like on the other side of this pandemic?
My educated guess — there will be 3 waves in our real estate market going forward for the next 6-12 months.
THE FIRST WAVE is going to be those people that were maxed out and unprepared for any contingencies and emergencies in their lives. Which is fine, as long as life keeps firing on all cylinders. As a result of this pandemic, society's weak spots have been revealed.
The first wave will be the people that need to sell in order to get out from under a mountain of debt and have either lost their jobs or realized just how economically fragile they are. Buyers here will be opportunity buyers that have cash and the ability to close deals quickly.
THE SECOND WAVE of buyers and sellers will be those people who have come to the realization that this event has shown them a different path. There will be sellers looking to downsize, simplify and consolidate their wealth into more liquid assets. A lot of newly retired or near retired folks will likely be in this wave. I foresee many making life simple again and stepping back from their current lifestyles. This wave will also include families looking to consolidate their lives under one roof. I expect to see an increase in demand for multi-generation homes. These homes were already in high demand with low supply — this will be one area of good news for sellers of these homes in the coming months.
THE THIRD WAVE of home sellers and buyers will be those that are moving up. Opportunities will increase as I predict the inventory of larger homes will start to climb in the coming months. This group of sellers will help sustain the entry level inventory levels. The buyers in this cohort are likely going to be growing families. My prediction, watch the birthrate take a big jump at the end of the year and start of 2021, as one happy outcome of this social distancing and isolation should be a mini-baby boom.
The conversations and advice to our clients and readers has been centred around these likely scenarios. There will be pain, financially and emotionally, no doubt. From this pain and time of renewal there will be opportunities. How you react to this event and the situation you find yourself in will dictate which of these waves may affect you in the market.
We’ll be going through these scenarios and the lessons learned over the course of the next few weeks.
We’ll also be posting our series of talking with the experts webinars that we’ve been running for the past couple of weeks. In times of uncertainty, something positive and productive we can all do is connect and have open conversations about how to handle these situations.
Our commitment to you is to provide you with accurate data, without hype or sales pitches, to help get through this emergency and to pick up the pieces or take advantage of opportunities once life gets back to the new normal.
Thank you for reading. Stay safe and healthy, we will persevere and get through this.
Our subscribers have access to the most recent sales data, which will be a critical part of any real estate plan you have moving forward. To get access to these reports, click the link below.
Q1 and March stats reports for Guelph and the surrounding cities and townships are now available on our Market Reports page.
Curious what homes sales look like in today's market?
Our blog subscribers receive a free report every Friday with the weekly sales in each Guelph neighbourhood, plus the list price and the sold price of each property. If you are not a subscriber but would like access to these exclusive reports, click the link below to receive this week's sales reports instantly.
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Featured Property
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3+1 BED | 2.5 BATH | 1,631 SQ FT
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Listed by: Jeff Moisan, Broker
SEE FULL LISTING >>
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